MIAMI – Ultra-low-cost carrier Sun Country Airlines (SY) has announced intentions to become publicly traded, according to a company press statement.
The Minneapolis-based ULCC will trade on the NASDAQ under the ticker “SNCY” and will look to raise USD$100m during the initial public offering. “The number of shares offered and the price range for the proposed offering have not yet been determined,” read the statement.
The IPO will be backed by Apollo Global Securities and underwritten by a combination of banking giants including Barclays, Morgan Stanley and Deutsche Bank.
Industry experts agree that low cost airlines will recover quickest from the financial effects of COVID-19, and SY is looking to capitalize. At the end of January, they added 16 nonstop routes to destinations in the US and Mexico. Nine of those routes will be new destinations in their network.
Will Flexibility Win over Investors?
Despite a massive drop in passenger volume in the spring of 2020, Sun Country’s hybrid business model allowed the airline to stay afloat. They currently flies a mix of commercial, charter and freight with a fleet mainly composed of Boeing 737-800 aircraft. Back in December of 2019, SY signed an agreement with Amazon to operate 737-800F freighters with the Prime Air livery. Looking back, this decision proved vital as Amazon went on to ship record numbers of packages during the height of the pandemic.
A 60-plus page filing looks to win over investors by capitalizing on a deep-rooted history in leisure travel with destinations that are “nonstop and affordable”. According to the document, SY states their product is more closely compared to the likes of JetBlue (B6) and Southwest (WN), rather than fellow ultra-low-cost carrier’s Spirit (NK) and Allegiant (G4). “Our product includes more legroom than ULCCs, complimentary beverages, in-flight entertainment and in-seat power, none of which are offered by ULCCs”, said the prospectus.
“The combination of our agile peak demand network with our elevated consumer product allows us to generate higher TRASM [total revenue per seat mile] than ULCCs while maintaining lower Adjusted CASM [cost per available seat mile] than LCCs”. In plainer terms, Sun Country believes that they can deliver a product comparable to Jetblue, while maintaining costs comparable to Spirit. If they can follow through on this statement, SY has the opportunity to quickly become a player in the US airline industry.
Featured Image: Sun Country Boeing 737-800. PHOTO: Mateo Skinner/Airways